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In competitive markets, where customers have an effective choice of supplier of a service, the quality of the services a company provides can give it a significant competitive advantage over its rivals. For example, where there is little scope for price competition companies can compete on quality and companies can also provide differentiated products with high and low quality for higher and lower prices (e.g. first class air travel and low cost airlines). Competition has proven to be an efficient way to drive service quality improvements, particularly in utilities, and one of OUR’s principal functions is to promote effective competition wherever possible in utility markets in Guernsey so as to achieve benefits for Guernsey consumers. However where there are monopoly providers, or where effective competition has not, or is not likely to develop quickly, there may be a need for regulation to act as a proxy for competition to protect consumers’ interests and ensure consumers have access to high quality utility services. In Guernsey there is a single monopoly provider in both the electricity and postal markets and with the telecommunications market only recently opened up to competition, there is a dominant incumbent telecommunications operator. Consequently the OUR has taken a number of steps in relation to quality of service in these sectors which are described in the following sections:
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